GOVT UN­DER FIRE FOR ‘UN­CER­E­MO­NI­OUS’ RE­MOVAL OF PSU IN­DE­PEN­DENT DIREC­TORS

FOR­MER ONGC CHIEF WRITES TO MODI, ALSO ASKS WHY PSU HEADS ARE NOT GET­TING EX­TEN­SIONS

Resource Digest - - GAS -

Ques­tions are again be­ing raised on ‘cor­po­rate gov­er­nance’ in pub­lic sec­tor un­der­tak­ings. The lat­est salvo comes from for­mer ONGC Chair­man RS Sharma, who is a mem­ber of var­i­ous task forces and gov­ern­ment com­mit­tees.

Rais­ing the is­sue in a note to Prime Min­is­ter Naren­dra Modi re­cently, Sharma ques­tioned the ‘un­cer­e­mo­ni­ous’ re­moval of in­de­pen­dent direc­tors and the gov­ern­ment’s pol­icy on not giv­ing ex­ten­sions to PSU chiefs af­ter com­ple­tion of their ini­tial five-year term, even though they may have many years of ser­vice left be­fore their nor­mal su­per­an­nu­a­tion at age 60.

Af­ter the Modi Gov­ern­ment came to power last year, an in­for­mal com­mu­ni­ca­tion from ‘higher au­thor­i­ties’ had gone to gov­ern­ment de­part­ments and min­istries that all ap­point­ments on PSU boards made un­der the pre­vi­ous UPA regime would be re­viewed.

This re­sulted in many in­de­pen­dent direc­tors ap­pointed un­der the UPA regime los­ing their po­si­tions with­out be­ing given a valid rea­son.

Com­pa­nies that have been af­fected in­clude In­dian Oil Cor­po­ra­tion, Hin­dus­tan Petroleum Cor­po­ra­tion and Coal In­dia. Even to­day, in­de­pen­dent di­rec­tor po­si­tions in In­dian Oil and Coal In­dia, among oth­ers, are ly­ing va­cant.

AP­POINT­MENT PROCESS

The process for ap­point­ment of an in­de­pen­dent di­rec­tor to a pub­lic sec­tor com­pany’s board is sim­i­lar to that for a func­tional di­rec­tor of such en­ti­ties. The nodal min­istry se­lects the name from a Depart­ment of Pub­lic En­ter­prises list for such direc­tors, and sends it to the search com­mit­tee.

The com­mit­tee scru­ti­nises the peo­ple on the list and fi­nally rec­om­mends the name/names to the nodal min­istry, which then ap­proaches the Ap­point­ments Com­mit­tee of the Cab­i­net (ACC), chaired by the Prime Min­is­ter, for the fi­nal no­ti­fi­ca­tion. The only other mem­ber of the ACC is the Home Min­is­ter.

Sharma, who him­self was nom­i­nated as an in­de­pen­dent di­rec­tor in Steel Author­ity of In­dia last year, was in­for­mally told that his name would not be con­sid­ered at the an­nual gen­eral meet­ing (AGM) and that he need not at­tend the same.

In fact, Sharma was given the op­tion to re­sign, which he de­clined. But by virtue of his name not be­ing con­sid­ered at the AGM, he ceased to be an in­de­pen­dent di­rec­tor.

OTHER IN­STANCES

More re­cently, the de­ci­sion to not ex­tend for­mer SAIL Chair­man and MD CS Verma’s ten­ure de­spite hav­ing enough years of ser­vice and re­ports that NTPC CMD Arup Roy Choudhury is not get­ting an ex­ten­sion at the end of his ten­ure, have cre­ated un­cer­tainty.

Sharma said in his let­ter that th­ese moves raise ques­tions over gov­ern­ment in­ter­fer­ence in the func­tion­ing of the PSUS.

R.S. SHARMA, FOR­MER

CHAIR­MAN OF ONGC

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